Worldwide external disk storage systems enjoyed significant year-over-year growth in the first quarter of 2012, according to research firm IDC. Factory revenues grew year-over-year by 7.1 percent, to total a bit under $6.0 billion, while the total capacity of the shipped disk storage systems totaled 6,037 petabytes (a year-over-year growth of 20.8 percent).
IDC defines disk storage systems as “a set of storage elements, including controllers, cables, and (in some instances) host bus adapters, associated with three or more disks.” To meet the firm’s definition, a system doesn’t necessarily need to belong inside a server cabinet. IDC also excludes infrastructure storage hardware such as switches and non-bundled storage software from its definition.
IDC’s data suggests that, despite some well-publicized shortages and price increases, the market for storage remains robust. “Entry level systems (ASV of less than $25,000) were hit hardest owing to their reliance on SATA and near-line SAS drives, which experienced price increases due to the Thailand floods,” Liz Conner, IDC’s senior research analyst for Storage Systems, wrote in a June 8 statement. “However, strong overall growth in emerging regions and the slowdown in price per gigabyte ($/GB) erosion helped the market post year-over-year growth.”
The floods during Thailand’s 2011 monsoon season wiped out roads and devastated factories responsible for hard disk drive (HDD) production. Most of the world’s HDD supply comes from that country.
IDC pegged the top vendors in the space (by factory revenues) as EMC (with 29 percent of the market in the first quarter of the year), NetApp (14.1 percent), IBM (11.4 percent), Hewlett-Packard (10.2 percent), and Hitachi (9.4 percent). Other vendors constituted a combined 25.9 percent of the market.
Meanwhile, a research report from IHS iSuppli predicted that, while the market for hard disk drives is recovering somewhat from the Thailand floods, the average selling prices won’t return to pre-disaster levels until 2014.
The flood forced average HDD prices to spike from $51 per unit (in the quarter before) to $66; it has since begun a slow decline, to $65 in the second quarter of 2012. All that being said, IHS analysts have no reason to believe that prices will fall faster in the near future.
“HDD manufacturers now have greater pricing power than they did in 2011, allowing them to keep ASPs steady,” said Fang Zhang, analyst for storage systems at IHS, wrote in a June 6 research note. “With the two mega-mergers between Seagate/Samsung and Western Digital/Hitachi GST, the two top suppliers held 85 percent of HDD market share in the first quarter 2012. This was up from 62 percent in the third quarter of 2011, before the mergers. The concentration of market share has resulted in an oligarchy where the top players can control pricing and are able to keep ASPs at a relatively high level.”
IHS also noted that demand for HDD continues to increase, partially in conjunction with a greater need to store cloud and corporate data. Under those circumstances, a dip in prices—however slight—can potentially be a good thing for any business looking to provision a data center.